Stablecoin Risk Spurs U.S. Agencies to Seek Power to Crack Down

Federal agencies took their first step toward regulating stablecoins, raising concerns that the tokens could threaten the U.S. economy while making a big bet on the bitterly divided Congress to put guardrails on the fast-growing market.

In a highly anticipated report, the Treasury Department, Federal Reserve and other regulators urged lawmakers to let them police stablecoin issuers like banks with robust capital requirements and constant supervision. But as a Plan B, the watchdogs made clear they would activate a rarely used power to examine whether the coins pose a systemic threat to financial stability -- a review that could trigger a raft of new rules.